Is an ex hiding financial assets during divorce proceedings?

The division of assets during divorce proceedings can be one of the hardest things to agree on. The potential loss of property, financial assets, inheritance money and pension pots can lead to strong emotions and much heartache.

Here we look at how the financial settlement process works and what to do if you suspect your ex is hiding or disposing of assets, to ensure a more favourable outcome for themselves.

Financial disclosure

The process starts with both parties completing a Form E, which requires full financial disclosure, along with bank statements and evidence of any loans, debts, or liabilities. This disclosure of each party’s financial assets is the basis upon which a fair settlement is agreed between them.

Hiding & disposing of assets

There are serious consequences for those who try to cheat the system and it is now more difficult than ever to hide or dispose of assets without getting caught, given the level of scrutiny now possible of bank accounts.

Ways in which assets may be hidden or disposed of include the following:

• Transferring money to an account which isn’t declared on Form E
• Transferring money to other family members.
• Transferring money to offshore accounts.
• Hiding money in PayPal or Crypto currency.
• Creating false invoices to fabricate debts and loans.
• Underestimating the value of a business.
• Undervaluing assets such as artwork, cars, antiques, and jewellery.

If money or assets have been transferred up to three years before the divorce, your ex will need to prove that this was a legitimate transfer. If they cannot prove this, a judge can overturn the transfer and the amount of money involved is added into the matrimonial pot.

Do not conduct your own investigation

If you suspect your ex is hiding or disposing of assets it can be tempting to conduct your own investigation. However, it’s important not to do this, because if you open your ex’s documents, emails, or post, or look through personal documents without the consent of your ex, you could be subject to criminal and civil penalties.

Having said that, you are perfectly able to research information held at Companies House and the Land Registry, both accessible to the public, to do your own research.  Where one party has complicated finances spread across the world, you can also engage a professional asset tracer or forensic accountant to use all the legal means available to track down assets in the UK and abroad. If they can uncover sufficient evidence that there are hidden assets, this can be used to convince a judge to consider them as part of the divorce settlement.

What to do if you suspect an ex is hiding assets

If you believe your ex is in the process of hiding financial assets, you can apply for a freezing order or a court order for the non-disclosing party to provide information or documentation pertaining to the hidden asset or source of income. The court can also be asked to make orders against third parties, including accountants, business colleagues or employers, to disclose information or documentation, which will help to confirm the existence of any hidden assets or source of income.  In both cases, costs can also be sought against the defaulting party.

If it emerges that there were hidden assets after the settlement has been made, the settlement can be reopened. Once this was a rare occurrence, but owing to the more sophisticated ways in which undisclosed assets can now be revealed, it is now more common. With today’s money laundering protocols, banks are no longer willing to protect those with offshore accounts in places once considered a haven.

Consequences of hiding assets

In the event of a party’s failure to comply with any disclosure orders, the court can be asked to find them in contempt of court, which can result in a fine or in extremely serious cases, a committal to prison.

If you have concerns that your ex is not being honest about their finances, or that they may have already disposed of assets, we offer a no obligation initial consultation of up to one hour for a fixed fee, where you can receive specialist advice from a member of our team. At Tisshaws, we are experienced in resolving contentious issues such as these, both at court and through alternative methods of dispute resolution.  To book an initial consultation with us, please contact 01444 472700, complete the form below or email [email protected].